“Why does my pet insurance cost more than my car insurance?!” is a question that comes up occasionally.
It’s completely understandable that customers will draw comparisons – especially at the current time when people are perhaps more focused on their outgoings and exploring opportunities to cut costs in general.
Pet insurance doesn’t always cost more than car insurance of course, but why might it happen? There are actually a few reasons…
Put simply, this is the percentage of customers claiming per policy. For drivers aged between 31 and 70, the car insurance claims frequency is as low as 7% 1.
Our experience at Vetsure is that a typical customer will claim, on average, once every two years. In other words, the claims frequency associated with pet insurance is significantly higher.
“But my car insurance went down at my last renewal?!”
The Association of British Insurers (ABI) reported in October 2020 2. that average motor insurance premiums were at their lowest level in four years. A big contributory factor in this is the pandemic. Lockdowns have resulted in less cars on the road which, in turn, means a much lower rate of accidents and resulting claims. The claims experience of pet insurers since the outbreak does not follow that of car insurers, however. Pet claim submission is as high as ever and, in some cases, higher. Anecdotally, it does appear that, by spending more time at home with their pets, owners are picking up more on potential problems and – quite rightly – getting these checked out. Furthermore, dog walking has undoubtedly increased as we all enjoy our allotted exercise allowance with our canine companions. This does, unfortunately, also mean increased risk of picking up an injury – a surprisingly common occurrence on a foray into the forest or a splash in the local stream.
Your car insurance doesn’t cover breakdown.
If your car is not running as it should be you can’t claim on your car insurance and will, instead, need to reply upon warranty cover, breakdown service and / or your own savings.
However, if your pet is under the weather and requires treatment from a vet, this can be covered by your pet insurance policy.
Car insurance is compulsory.
Because all drivers are required to hold car insurance (to at least the required minimum level) this means that car insurance providers have huge amounts of buying power resulting from the volume of repairs undertaken. Some larger providers will even have their own network of repair centres and preferential relationships with hire car providers – which all help keep costs down.
Veterinary treatment is often more expensive than car repairs.
Veterinary professionals are highly skilled and equipped to treat a myriad of complex medical conditions across a range of species. It takes at least 5 years to train to become a veterinary surgeon. Furthermore, garages tend to operate on a scheduled appointments basis during ‘regular hours’. If your pet becomes seriously ill in the middle of the night or on Christmas Day, for example, it will still be seen as an emergency by a team of veterinary professionals – either at your regular surgery or a specialist emergency ‘out of hours’ provider.
Pets can develop long-term conditions.
If you prang your car you will typically need one, maybe two, visits to the garage to get it all shiny and new again. Our pets, on the other hand, can unfortunately develop chronic (long-term) conditions that may require treatment for life. All Vetsure policies are ‘lifelong’ which means that benefit limits for eligible conditions ‘recharge’ each time you renew. As such, an owner of a cat with diabetes or a dog with arthritis could continue to claim for the life of their pet. This will often mean multiple claims per policy year – especially where ongoing medication is required.
Vets don’t “write-off” pets.
If your car is damaged, and the insurer considers it to now be worth less than the cost of repairing it, they will likely class it as “write-off” or “total loss”. In this scenario, they may simply offer to sell the car for scrap or “salvage” in order to recoup some of the claims costs and will offer you a settlement or perhaps a replacement car.
Your pet is a member of your family. If they become seriously ill your local veterinary team will move mountains to explore every option to try and help get them back on their paws. This might take days, weeks or even months, but pet insurance is available to help customers cover the costs of such endeavours with a view to giving you many more happy years with your companion. Your pet is, after all, priceless to you and certainly not replaceable.
The cost of veterinary treatment is increasing.
Over the past ten years, the average claim value has increased by 75%, whilst the average premium has only increased by 50% 3.. Advancements in veterinary medicine continue at pace with more and more sophisticated treatment, diagnostic and surgery options becoming available all the time – from joint replacements, to CAT scans and radiotherapy. Pet insurers need to ensure sustainability by setting their premiums to reflect the availability of such amazing options. Whilst the methods used to repair cars has advanced over the years this is simply not comparable with the rate of advancement within the veterinary profession.
During this pandemic, more and more people have discovered the absolute joy of pet ownership. For some, it will be for the first time. For others, it may be having the time to enjoy those extra walks together or have your cat curled up in your laptop (or sat on the keyboard) during all those video meetings. For the elderly and vulnerable, it could be the difference between companionship and isolation and loneliness. Our pets are truly special.
So, yes, it might cost more to insure your feline or canine friend than your car sometimes, but – I think you will agree – they are definitely worth it.